The White House Fires a Warning Shot on Obamacare, but Are They Firing Blanks?

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In yet another example of the whiplash-inducing speed at which the Trump White House can announce new policy and then immediately walk it back, the Director of the Office of Management and Budget on Tuesday appeared to renege on a promise that top Democrats say was a key element of a deal to fund the government through the end of the fiscal year. A little while later, his staff retracted it claiming OMB Budget Director Mick Mulvaney had misspoken.

Democrats had insisted that the administration commit to funding cost sharing payments for health insurers under the Affordable Care Act as a condition of their support for a deal struck last week on a spending bill that would help avert a government shutdown. The payments were never made part of the spending bill itself, but Democrats said that the White House had agreed to continue funding them, at least in the near term.

In a briefing at the White House Tuesday afternoon, Mulvaney said that the so-called Cost Sharing Reduction payments, which offset the cost to insurers of providing affordable health coverage to low-income consumers, might be discontinued when they next come due in three weeks.

“We’ve not made any decision,” he said. “The payments are due, I believe, on the 20th or 21st of every single month. We’ve not made any decisions at all on May.”

The statement stunned insurance industry representatives in Washington. Health insurers are already extremely nervous about the Trump administration’s apparent willingness to walk up to the edge of policies that experts believe would cause the health insurance marketplaces created by the Affordable Care Act to implode.

Insurers are already leaving the ACA’s exchanges as it becomes difficult for them to turn a profit and the assurance of future CSR payments looks more and more doubtful.

Congressional Republicans have refused to put the CSR payments into a spending bill because they are currently awaiting the results of a lawsuit that they filed trying to block the payments in the first place. They insisted that the Obama administration was making the payments illegally because there was no specific appropriation for them.

However, even House Speaker Paul Ryan has said that he believes the payments should continue to be made until there is a resolution to the suit to avoid creating chaos in the marketplace.

Robert Greenstein, president of the Center on Budget and Policy Priorities, in an analysis published Monday, said, “Insurers have warned that without the guarantee of CSR payments, they will have to raise premiums sharply to cover the cost, and some major insurers have warned they would simply exit the marketplace altogether, either nationwide or in various states.” The damage wouldn’t be contained to people who buy insurance on the ACA exchanges, he warned but would extend to the federal budget.

Mulvaney’s remarks also surprised Democrats who said that Trump had agreed to continue paying the Affordable Care Act subsidies to insurers after the White House had threatened to use that issue as a bargaining chip to extract initial funding for Trump’s proposed wall along the southern border with Mexico. Payments for Trump’s wall were negated by the democrats negotiating the budget deal.

Last Wednesday, House Minority Leader Nancy Pelosi (D-CA) confirmed to reporters that she had received assurance from White House Chief of Staff Reince Priebus that the subsidies would continue to flow, at least temporarily.

“Our major concerns in these negotiations have been about funding for the wall and uncertainty about the CSR payments crucial to the stability of the marketplaces under the Affordable Care Act,” Pelosi said in a statement after two phone calls with Priebus. “We’ve now made progress on both of these fronts.”

Asked today whether he was worried if the White House could pull the rug out from under the Democrats, Senate Minority Leader Chuck Schumer of New York replied, “Well, you know, I think it makes no sense to hurt the health care of six million people to achieve a political goal. And if they do it, it’s going to be on their backs, and I think that’s why they stepped in at this point and gave a short-term renewal.”

Not long after Mulvaney left the briefing room, reporters began reaching out to OMB staff who later Tuesday afternoon insisted that the Budget Director “misspoke” when he said that the May payments might not be made.

OMB now clarifies - they ARE paying Cost sharing subsidies this month -- no decision after that. says he misspoke. https://t.co/jwNBPCKE5t

Mulvaney’s remarks had come in the context of an angry presentation to White House reporters in which he complained that Democrats had been declaring victory in the budget negotiations rather than treating the deal as an example of bipartisan agreement.

“They’re walking around trying to make it like they pulled one over fast on the president, and I just won’t stand for it,” Mulvaney said.

Among the elements of the deal he described as victories for the president was the absence of legislative language requiring the CSR payments. He said that he had seen media reports claiming otherwise and said, “There’s no Obamacare bailout money in this package. There’s absolutely no language in this bill that requires us to make any Obamacare bailout payments, and CSR payments, in any way, shape or form.”

A longtime reporter on the intersection of the federal government and the private sector, Rob Garver is National Correspondent, based in Washington, D.C. He has written for ProPublica, The New York Times and other publications.

Washington Editor and D.C. Bureau Chief Eric Pianin is a veteran journalist who has covered the federal government, congressional budget and tax issues, and national politics. He spent over 25 years at The Washington Post.